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Trading Strategy for the week ending April 23, 2000

A sharp fall in technology stocks in the last two trading sessions has confirmed the weakening position of this sector. As mentioned earlier, rally that took place in the previous week was of a corrective nature, and lacked steam. Since it was in response to its previous fall, it failed to repair the damage done during the previous fall where almost 99 per cent of technology stocks broke their medium term support levels.

While the chances of breaking previous week's bottom in technology stocks are bright, for traders as well medium term investors, the top formed on Wednesday becomes a very important reference point. If these stocks manage to remain above their panic levels, and post a higher bottom the position would improve.

However, for a good uptrend, these stocks need to cross below mentioned barriers. And unless that is done, the short-term outlook for these stocks will remain bearish, and fresh long positions can be avoided at this juncture.

The levels are given below: Infosys (Rs 10,600), Satyam Computer (First resistance Rs 4250, last hurdle at Rs 4500), Himachal Futuristic (Rs 1500), Global Tele (Rs 2135), Silverline (Rs 780), Rolta (First resistance at Rs 522, last hurdle is at Rs 550), Pentamedia (Rs first resistance Rs 930, last hurdle is at Rs 1020), SSI (Rs 4500), Digital Equipment (first resistance at Rs 770, and last hurdle is at Rs 840), Zee Tele (first resistance is at Rs 1020, and last hurdle is at Rs 1090).

By Arc Investments and Consulting

Stocks

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